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Brands distance themselves from Bangladesh factory collapse

Will consumers start to look at clothing tags to see where they were made, and pass on ones that say “Made in Bangladesh” or “Made in India?”

Some retail giants are scrambling to distance themselves from the apparel trade in Bangladesh, after a building collapse in Bangladesh killed more than 700 garment industry workers.

Others are taking a big gamble that the public will quickly forget the tragic event and get back to business as usual.

But it might not be that easy to overcome this latest in a series of disasters at clothing factories that’s tainting the billion-dollar industry. The public is getting smarter, and people are figuring out that they can influence corporate giants through purchasing power.

Claims by some manufacturers that their products weren’t even made in the collapsed building is turning out to be far from true, as their labels were found in the rubble.

The CEO of the Canadian company Loblaw— whose discount clothing brand Joe Fresh was made in the factory—stood out, going against the tide of denials by accepting responsibility and saying there were at least 28 other brands using the factories. He urged his counterparts at other clothing companies to end their “deafening silence.”

The one-off responses and denials are more effective individually, but taken as a whole they sound hollow. Responses kept to the theme of shock, compassion, and pending investigations, as well as potential safety measures.

• KiK, a German clothing company, said it was "surprised, shocked, and appalled” and that an investigation was pending.

• “We are continuing to work with the industry association, suppliers, brands and other interested parties to come to an appropriate resolution,” Kevin Gardner, a spokesman for Wal-Mart, said to Bloomberg News.

• Benetton's chief executive, Biagio Chiarolanza, told The Wall Street Journal that Benetton is working with labor leaders to improve working conditions.

• J.C. Penney told Bloomberg it will “take an active part in the dialogue that aims to come up with a comprehensive approach—that includes multiple stakeholders—to solving the factory safety issues in Bangladesh.”

On the far end of the spectrum is American Apparel CEO Dov Charney, saying business as usual has to stop. In a somewhat self-serving blog post, he urged consumers to buy American-made clothing, such as the ones his company makes at a Los Angeles factory.

"The apparel industry's relentless and blind pursuit of the lowest possible wages cannot be sustained over time, ethically or fiscally," Charney said. "As labor and transportation costs increase worldwide, exploitation will not only be morally offensive and dated, it will not even be financially viable."

Disney also came out looking good since it made a decision this year to restrict countries where its products are made. Bangladesh was on the restricted list.

Disney rethought the business-as-usual credo: “Disney is a publicly held company accountable to its shareholders and after much thought and discussion we felt this was the most responsible way to manage the challenges associated with our supply chain,” said Bob Chapek, president of Disney’s Consumer Products division.